Today, many businesses must deal with complex operational models which present many varied types of operational risks. In addition to the normal business risks, increasing privacy related regulations and ethics rules must be complied with by businesses. It can be particularly important to evaluate risks posed by making changes to the operations of a business enterprise. There is an increasing need for comprehensive governance process to assure operational risk associated with changes and new projects and programs is managed appropriately.
Failure mode and effects analysis is a procedure for analysis of potential failure modes within a system for the classification by severity or determination of the failure's effect upon the system. Failure mode and effects analysis is used in the manufacturing industries in various phases of the product life cycle. Failure mode and effects analysis is also used in government and the military. It characterizes failures according to their impact on mission success and personnel, but has a process focus that typically cannot identify business risks such as market and strategic risks that potentially occur when a product or service change occurs.